Who does government serve? Time to reform liability?
Is Government for Big Business or Little Consumer?
Historically, government evolved from aristocrats. So now do officials serve their antecedents more than the public at large? If I had my druthers, government would uphold safety standards, not subsidize insiders. Well, knowing how things are broken is the first step to fixing them. We trim, blend, and append two 2010 articles from (1) ProPublica, Mar 15, on regulators by Marian Wang and (2) AlterNet, Mar 19, an excerpt from a new book, The Gods That Failed, on privileges granted to Big Business, generally owned by rich old families, by Larry Elliott and Dan Atkinson.
by Marian Wang and by Larry Elliott & Dan Atkinson
Safety Advocate: Auto Regulators Are Underfunded and Afraid to Ask for More
Last week, Michigan Rep. John Dingell said in a hearing that the National Highway Traffic Safety Administration has "suffered years of stagnation in funding."
The comment was made before the House Energy and Commerce Committee, which is investigating the auto regulator's handling of consumer complaints about Toyota. The full quote:
"NHTSA has suffered years of stagnation in funding and, in many cases, has endured a reduction in personnel levels, most notably in its Office of Defects Investigation."
That's what we had initially hypothesized, too, here at ProPublica. So we rang the government and asked for NHTSA's requested and enacted funding levels for enforcement, which includes money spent on vehicle safety compliance, safety defects investigation and odometer fraud.
What we found was that since 2000, the regulatory agency has essentially been granted its requested funding levels for enforcement.
But Advocates for Highway and Auto Safety, an alliance of consumer groups, insurance companies and others, believes the NHTSA has been lowballing its funding requests.
When it comes to agency funding requests, the White House is the ultimate decision-maker. "When an administrator says we have enough resources, he's [being] constrained within the political pecking order," said Henry Jasny, general counsel for the group.
The troubling news surrounding Toyota has brought sudden scrutiny upon this agency of 632 employees, of whom only about 50 work in the Office of Defects Investigation. Olivia Alair, press secretary for the Department of Transportation, says the NHTSA is seeking 66 more employees overall in fiscal 2011. If Congress approves the necessary funding, only up to eight of those positions are slated for the Defects office.
JJS: Bureaucrats and administrations sure do keep busy doing favors for insiders. Bending over backwards for corporations is the current incarnation of an old tradition of politicians, going back to the beginning. Indeed, to dish out the spoils was the original raison d’etre of government.
An Economic Free-For-All
Teddy Roosevelt -- a Republican and an imperialist -- said: “The vast individual and corporate fortunes, the vast combinations of capital which have marked the development of our industrial system, create new conditions and necessitate a change from the old attitude of the state and the nation toward property.”
Investment banks, hedge funds, and others are entirely dependent on the juridical and political systems they effect to despise.
Government created (1) limited liability which allows corporations to enjoy all the rewards of their activities while passing on much of the losses to society at large, (2) fractional reserve banking which allows banks to create new money out of thin air -- fraudulent behavior in any other walk of life, and (3) the trust which conveniently allows assets to own themselves.
The limited liability company is not only an extraordinary mechanism for privatizing profit and socializing losses, but also allows shareholders and executives to escape much of any bad consequences of their decisions. In Britain, corporate signatures end in ‘Ltd’, that means ‘limited liability’. The Latins use ‘SA’ -- Sociedad Anonima, or Society of the Nameless. It all adds up to the same thing: when the cops come, there’s nobody home.
People with loans may imagine their borrowings are made up of money belonging to depositors. Almost all of it is not; it is bank-created. When banks create too much of it, generating inflation, they put up interest rates, which increases their return on their loans.
Trusts allow assets to be parked, away from any named owner. Keeping assets for a time off any person’s books offers advantages for tax planning and many other maneuvers.
Show us a real-life merchant adventurer who abjures these three vital legal props and instead hazards his own fortune, day in and day out, in the pursuit of business and we will be lusty in our demands that the state get off his back.
JJS: Big Business could win such privileges because the owners enjoyed power. Initially, that power came from corralling the rents for land and resources. And capturing rents today, despite how archaic the notion may seem, still is how the elite commands favors.
The watchdog Common Cause reports that the biggest contributors to local election campaigns are businesses in real estate development, and they get their money from land. In national campaigns, two major players are oil (who just about write US foreign policy) and banking; the former get their wherewithal from natural resources and the latter from mortgages, the biggest portion of which is debt for land. So even in the 21st century, the real state is real estate, even after all these centuries.
The only thing that’s going to level the playing field politically is to level it economically, and that means that ordinary people must acknowledge the commonweath -- all the money we spend for sites and resources -- and demand that they and everyone get a fair share. The policy of geonomics can deliver such justice, by recovering and disbursing rents in lieu of politicians taxing our earnings and then favoring their backers. It all starts with the feeling of belonging, of belonging to the earth community and the worth of earth belonging to everyone.
Jeffery J. Smith runs the Forum on Geonomics.
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